9911796707
TMI Blog2015 (6) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... uments. According to him, the Petitioner might have signed these documents inadvertently in routine course and/or her signatures might have been obtained by mis-representation of without knowing the real nature of the transactions under challenge in this petition, and therefore, these documents are not binding on her. Doctrine of estoppel - Having analyzed the facts and circumstances of the case, I am not inclined to accept that the doctrine of “estoppel”, waiver” and/or “acquiescence” would apply to the facts of the case in hand. By virtue of Section 108 of the Act, it is mandatory for a valid transfer of shares that the transferor and transferee must sign the form as provided in Section 108 and submit the same to the Company before making any entry on the reverse of the share certificate. It is also mandatory for the company to ensure and check as to the validity of the transfer form executed under Section 108 of the Act. Further, the transfer must be approved by the Board of Directors by an appropriate resolution to be passed in this regard, and thereafter, only the entries on the reverse of the share certificates need to be made. It is a well settled proposition of law as held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / joint shareholders - It is a settled proposition that a party cannot be left without remedy under law. It is also fundamental law that no party can be compelled to invite evidence against himself/ herself. It is also pertinent to mention here that the parties, who, according to the Respondents, are the necessary and proper parties have not approached this Board till date for their impleadment as a party in this petition despite having knowledge of the instant proceedings. Therefore, in my view, the Contesting Respondents are not entitled to contend that the petition suffers from non-joinder of necessary and proper parties. I have also considered the plea taken by the Respondents that keeping in view the complicated question of facts and law, the CLB is not competent to adjudicate this petition in the summary jurisdiction, and the proper recourse for the Petitioners is to file a civil suit for declaration with respect to the title of the shares, as held in M/s Ammonia Supplies Corporation (P) Ltd. V/s M/s Modern Plastic Containers Pvt. Ltd. [1998 (9) TMI 427 - SUPREME COURT OF INDIA]. Having gone through the said decision, it is to be noted that the Hon’bie Apex Court has held in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sy which is identical in all the cases. I, therefore, for the sake of convenience clubbed all the cases for the purpose of hearing and decision. However, I would like to reiterate that save and except the variance in the number of shares and company's name, the facts and point in law being one and the same, it would be sufficient to confine the consideration only to the pleadings in C.P. No.19 of 2011. 3. It is pertinent to mention here that in the course of trial the Original Respondent Nos. 3 to 5 / Applicants therein filed Company Applications being C.A Nos. 154 to 161 of 2014, seeking cross examination of the Petitioner. These applications have also been clubbed and are being decided alongwith the Company Petitions. 4. The Short fact of the case are as follows :- 4.1 The Petitioner is one of the Trustees of a private family trust, namely, N.S.Trust, which has been settled under an Indenture of Trust dated 10/4/1999 (hereinafter referred to as "the Indenture" in short). The Respondent No.1 is a private limited company incorporated for the purposes of holding and/or facilitating investments of the Late Dr. Neelkanth Kalyani and Mrs. Sulochana Kalyani, the Respondent No.2 (sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (since deceased) herein. However, with a view to maintain cordial family relations and for other diverse reasons, including deteriorating health of the Respondent No.2, the Petitioner and the Respondent No.2 did not take any legal action in the matter. 4.7 It is stated that, in January, 2010, the Petitioner and the Respondent No.2 revoked the two Powers of Attorney, which the Respondent Nos.3 and 4 had managed to obtain from them in the year 2008. It is alleged that as a result thereof, the Respondent No.4 started harassing the Petitioner and the Respondent No.2 in various ways, which led to a complete family unrest. Ultimately, as a result of disputes in the family, the Petitioner took search of records of various statutory authorities, whereupon, inter alia, it was discovered that the impugned shares of the Company held by the Trust were purportedly first transferred in favour of the Respondent No.2 and then further transferred In favour of the Respondent No.3. It is submitted that the purported transfer of the impugned shares is not valid and as such the Illegal changes in the relevant documents need to be rectified for the reason stated hereinafter. a. Because, by virtue of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Company, it is stated that the Company has acted in accordance with law pursuant to the documents executed by the Petitioner in relation to the transfer of impugned shares and hence the Petition deserves to be dismissed. 5.2 In the reply filed by the Contesting Respondents, they have stated that the Petitioner is no longer a trustee or a beneficiary of the N. S. Trust ('the said trust'). It is stated that by a letter dated 6/7/2007, addressed to the Board of Trustees of the N.S. Trust, the Petitioner had tendered her resignation as a trustee from the said date and requested the Board of Trustees to accept her resignation and relieve her of her duties as trustee. 5.3 It has been further stated that by a Declaration of Relinquishment executed on 7/7/2007, the Petitioner had stated that she has sufficient income of her own; she is of an advanced age and after discussions and deliberations with her husband i.e. Respondent No.2 (since deceased) herein had decided to relinquish all benefits in the income and corpus of the said N.S. Trust. By the said Deed of Relinquishment, the Petitioner relinquished all her Rights as a beneficiary under the N. S. Trust. The said declaration was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of the said meeting was recorded in the Minutes of meeting dated 12/7/2007. 5.7 It is further stated that by a letter dated 20/7/2007, addressed by Mr. S. N. Inamadar, a Trustee of the said Trust, to the Board of Trustee, the said Mr. Inamdar referred to the minutes of the meeting dated 12/7/2007 and stated that after perusing the contents of the said minutes, the other Trustees had his consent to distribute/ transfer the income/corpus to the sole beneficiary of the Trust viz. Dr. Kalyani (Respondent No. 2 herein). 5.8 It is further stated that the shares of the Respondent No.1 Company were transferred to Respondent No. 2 (since deceased) on 17/9/2007. This fact was also known to the Petitioner as far back as on 17/9/2007, which is evident from a perusal of the share certificate, which bears the signature of the Petitioner as a Director of the Respondent No. 1 Company. Similarly, on 22/11/2007, the Respondent No.2 transferred his shares In the Respondent No. 1 Company to the Respondent No. 3 by a registered gift deed, which fact was also to the knowledge of the Petitioner, as the share certificate also bears the signature of the Petitioner as director of the Respondent No. 1 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 2014 in various company applications filed by the appellants in the 1st respondent's company petition. 2. 1 have heard Mr. Mookherjee, Mr. Bhatt and Mr. Kamdar, learned senior advocates for the contesting parties at some length. In my view, it is not necessary to decide these appeals on merits. The order under appeal disposed of applications filed by the present appellants challenging the maintainability of the original petition. It would, in my view, serve the purposes of justice, if the following order is passed. (a) The impugned order is quashed and set aside. However, it is clarified that this is without any examination at all of the correctness of otherwise of the order on merits but only in order to facilitate the other directions that follows. (b) The Company Law Board shall decide the Company Petition on merits. While doing so, it shall also consider and decide all questions as to the maintainability of the Company Petition without any way being influenced or bound by the order under appeal. (C) Parties are at liberty to file further affidavits in reply on or before 241^ March 2014. Rejoinder/s, if any, to be filed on or before 21" April 2014. (d) Mr. Mookhe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him, the Petitioner might have signed these documents inadvertently in routine course and/or her signatures might have been obtained by mis-representation of without knowing the real nature of the transactions under challenge in this petition, and therefore, these documents are not binding on her. 11. In my view, the main thrust of the Respondents' counsel to cross- examine the Petitioner was revolving with respect to her signature on the documents-in-question. In the facts and circumstances narrated above, in my opinion, there is no sufficient reason or cause for calling the Petitioner or any other person as a witness for cross-examination. The Applications are, therefore, hereby rejected, being misconceived and unwarranted, having regard to the stand of the Petitioner taken in the course of arguments of her counsel. 12. The first preliminary objection raised on behalf of the Contesting Respondents is that, according to the own case of the Petitioner, the subject shares belonged to "N.S Trust" and hence, the Petitioner has no locus standi to file the instant petition. Connected with this issue, the second preliminary objection raised on behalf of the Contesting Respondents is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a Director of the Company. According to him, such signatures have been subscribed on the dates of registration of such transfers i.e. 17/9/2007, when the subject shares were transferred in favour of the Respondent No.2, Dr. Nilkant A. Kalyani, and also on the dates of subsequent registration of transfer of the said shares from the Respondent No.2 to the Respondent No.3. He then pointed out that the Petitioner being director of the company and its authorized signatory at the relevant time, by subscribing her signatures to the endorsements recording such transfers has been duly confirmed and acknowledged such transfers and as such the Petitioner is now estopped from challenging the same. The Respondents' Counsel, therefore, contended that the Petitioner has no locus to file the instant petition and the same deserves to be dismissed on this ground alone. 16. As regards application of doctrine of "estoppel" and "waiver", the Ld. Sr. Counsel for the Respondents further submitted that as indicated hereinabove, the Petitioner herself has executed the documents i.e. letter of resignation dated 6/7/2007, Declaration of Relinquishment dated 7/7/2007, indenture dated 10/4/1999, filed as An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the Petitioner was never a consenting party to the impugned transfer of shares. 18. Mr.Bhatt further contended that it has been the Petitioner's case, right from the inception of the Petition, that her signatures have been indiscriminately, wrongfully and illegally secured by the Respondent No.4 on a large number of documents. According to him, the impugned share certificates, in fact, buttress the Petitioner's case. He submitted that the very fact that the Petitioner has signed on the reverse of two different share certificates in respect of the same set of shares, clearly, demonstrates that these signatures have been indiscriminately, wrongfully and Illegally secured by the Respondent No.4 for illegal purposes, including facilitating the Illegal transfers and raising such allegations. He, therefore, argues that the Petitioner has not knowingly signed the impugned share certificates, and hence, it Is wrong to allege that the Petitioner is not aggrieved party In terms of Section 108 of the Act. 19. In continuation of his argument, Mr. Bhatt next submitted that the impugned transfers are in breach of Section 108 of the Act, and as such, void. According to him, it is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e impugned transfers is the fact that if the Petitioner had, in fact, consented and/or knowingly participated in the impugned transfers, the Respondent Nos.3 to 5 could have secured her signature on transfer instruments and not resorted to mutilation of share certificate to remove her name there from. The Ld. Sr. Counsel submits that undisputedly, the Petitioner has not knowingly signed on any instrument of transfer to facilitate removal of her name as a member of Respondent No.1 and joint shareholder qua the said to 5 have shares. This, coupled with the fact that Respondent Nos.3 wrongfully secured the Petitioner's signatures on two share certificates in respect of the same set of shares, makes it apparent that the Petitioner has not consented or knowingly participated in the impugned transfers. They ts clearly, distinguish are against the Petitioner's volition. The aforesaid fact clearly, distinguish the present case from the facts of the aforesaid decisions referred to and relied upon by the Respondents. 23. Mr. Bhatt submitted that the ratio of the decisions is that statutory right can be waived by a party for whose benefit certain requirements or conditions have been provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon by the Contesting Respondents in support of their contentions. R-1 Sulochana N. Kayani Parvati Nivas 221, D Kalyani Nagar Pune 411 006, India Phone: (022) 26651001 Fax : (020) 26651999 July 6, 2007 To, The Board of Trustees NS Trust 221, D, Kalyani Nagar Parvati Niwas Pune 411 006 Dear Sir, Sub: Resianatlon of Trusteeship I had consented to act as "First Trustee" of your trust on 10`" April 1999. Due to old age and other responsibilities I am unable to continue to act as trustee of your trust. I am therefore resigning from my trusteeship from today. I request you to kindly accept my resignation and relieve me from my trusteeship of your trust. Thanking you, Yours sincerely, (Mrs. Sulochana Neelkanth Kalyani) R-2 Declaration of Relinquishment made and executed at Pune on the 7" day of July 2007. I, Mrs. Sulochana Neelkanth Kalyani, Age about 74 years, occupation: Industrialist, resident of 221, D, Kalyaninagar, Parvati Nivas, Pune 411 006 do hereby solemnly declare on oath and state as under: 1. That aprivate trust has been made on 10"of April 1999 by Mr. Manohar Bassappa Hattarik of Belgaum by an Indenture of the said date in the name and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said NS Trust. I was also beneficiary of the said trust. 2) By my declaration on oath made on 7''" July 2007 relinquished all my rights to the benefits of the said trust, whether to the income or to the corpus. I have voluntarily and on my own have relinquished my rights and benefits to which I was entitled. 3) By this letter I wish to inform you the fact of my relinquishment with a request to you to act as trustee of the said trust without considering me as beneficiary. You may act as if I was never beneficiary of the said trust. 4) A copy of my declaration on oath is sent to you along with this letter. Please acknowledge the receipt of the same. Thanking you, Yours sincerely, (Mrs. Sulochana Neelkanth Kalyani. 28. Having analyzed the facts and circumstances of the case, I am not inclined to accept that the doctrine of "estoppel", waiver" and/or "acquiescence" would apply to the facts of the case in hand. By virtue of Section 108 of the Act, it is mandatory for a valid transfer of shares that the transferor and transferee must sign the form as provided in Section 108 and submit the same to the Company before making any entry on the reverse of the share certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petitioner, has been removed without sufficient cause by the Company. 30. 1 have also gone through the decisions cited by the Respondents' counsel. I agree with Mr. Bhatt that the facts of this case and the facts of the reported cases are distinguishable and have, therefore, no application for the reason attributed by him in his submission referred above. therefore, for the sake of brevity would not repeat the same. I have, therefore, come to the conclusion that the Petitioner has locus standi to file the instant petition for redressal of her grievances by seeking rectification of Register of Members of the Company. These points are, therefore, answered accordingly. 31. Dealing with another preliminary objection raised on behalf of the Respondents, Mr. Mookherjee, Ld. Sr. Counsel appearing for the Contesting Respondents, submitted that the petition is bad for non-joinder of necessary parties, and therefore, liable to be dismissed at the threshold stage on this ground alone. The Ld. Sr. Counsel submitted that one Mr. Shrikrishna N. Inamdar is the Trustee of "N.S. Trust". However, he has not been impleaded as a party in this petition. Therefore inviting my attention to the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber/shareholder. It is not and cannot be an action in relation to the Trust. He, therefore, submitted that the objection raised by the Contesting Respondents is without substance and liable to be rejected 34. Having considered the rival submissions, in my opinion, preliminary objection with respect to non-joinder of by Answering Respondents is absolutely unsustainable In law. Further, the general rule in regard to impleadment and striking out of the parties is that the plaintiff In a suit, being dominus litis, may choose the person against whom he wishes to litigate. The Petitioner cannot be compelled to sue a person against whom he does not seek any relief. Consequently, a person who is not a party has no right to be impleaded against the wishes of the plaintiff. However, this general rule is subject to the exception as stipulated in Order 1 Rule 10(2) of the Civil Procedure Code which provides for impleadment of proper and necessary parties. It is a well settled proposition of law that a necessary party is one without whom no order can be made effectually, a proper party is one in whose absence an effective order can be made whose presence is necessary for a complete and final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iless. It is a settled proposition that a party cannot be left without remedy under law. It is also fundamental law that no party can be compelled to invite evidence against himself/ herself. It is also pertinent to mention here that the parties, who, according to the Respondents, are the necessary and proper parties have not approached this Board till date for their impleadment as a party in this petition despite having knowledge of the instant proceedings. Therefore, in my view, the Contesting Respondents are not entitled to contend that the petition suffers from non-joinder of necessary and proper parties. 37. In so far as the decisions referred to by the Respondents are concerned, in my opinion, the same have no application to the facts of the case in hand. The said decisions are distinguishable as the facts of those cases related to civil suits filed for recovery of property, whereas the present petition merely seeks rectification of the Register of Members so as to correct the wrongful deletion of the Petitioner's name as a joint shareholder in respect of the impugned shares and as a member of the Company. I, therefore, hold that non-joinder of the other co-trustee(s) in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had not actually resigned as a Trustee. 40. On the aforesaid premise, the Ld. Sr. Counsel appearing for the Contesting Respondents sought dismissal of the petition. 41. Replying to the aforesaid contentions, Mr. Bhatt, the Ld. Sr. Counsel for the Petitioner, submitted that the above allegation is also red-herring. He submits that the Petitioner's assertion of the letters and/or the Transfer Deed, being invalidated by exercise and practice of fraud, misrepresentation and undue influence, has no bearing on the substance of the Petition. According to him, the Petitioner has been confronted by the Respondent Nos.3 to.5 with these documents, which are plainly illegal and/or wrongful. He, therefore, submits that the Petitioner is entitled to contend that these documents stand vitiated being executed by playing fraud, misrepresentation and/or undue influence on her, and she shall challenge these documents in appropriate proceedings. 42. Mr. Bhatt further submitted that for consideration of grant of reliefs to the Petitioner, these documents are irrelevant. These documents relate to the matters of the trust, which the Respondent No.1, in law, is obliged not to take cognizance of. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is, without sufficient cause, omitted there from; or (b) default is made, or unnecessary delay takes place, in entering on the register the fact of any person having become, or ceased to be a member; 31. the person aggrieved, or any member of the company, or the company, may apply to the Court for rectification of the register. 32. Sub-section (1) (a) of Section 155 refers to a case where the name of any person without sufficient cause entered or omitted in the register of members of a company. The word 'sufficient cause' is to be tested in relation to the Act and the Rules. Without sufficient cause entered or omitted to be entered means done or omitted to do in contradiction of the Act and the Rules or what ought to have been done under the Act and the Rules but not done. Reading of this sub-clause spells out the limitation under which the court has to exercise its jurisdiction. It cannot be doubted in spite of exclusiveness to decide all matter pertaining to the rectification it has to act within the said four corners and adjudication of such matter cannot be doubted to be summary in nature. So, whenever a question is raised court has to adjudicate on the facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he admitted signature the Court Is able to conclude no fraud, then it should proceed to decide the matter and not reject it only because fraud is stated. 45. In view of the law laid down in the aforesaid case, it is, thus, clear that the original jurisdiction in respect of rectification of Register of Members lies with the CLB only. It is only the CLB, who after hearing, if finds that the questions involved in the case are complicated questions of facts and law, it may relegate the parties to the civil court. On a close scrutiny of the facts of this case, in my opinion, no complicated questions of facts and law are involved. As discussed above, Mr. Bhatt, Ld. Sr. Counsel for the Petitioner, in the course of his arguments has not disputed the signatures of the Petitioner on the documents- in-question. The Petitioner has failed to give any particulars of the alleged fraud or misrepresentation, in the petition. In the absence of the above, it cannot be said that the petition involves complicated questions of facts and law. I have also examined the citations referred to and relied upon by the Ld. Counsel appearing for the Respondents. He has sought numerous decisions on this point, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferring to the decisions viz. (1) (S.P. Chengalvaraya Naidu Vs. Jagannath & Ors.) reported In (1994) 1 SCC Pg.1 and (II) Sunil Poddar & Ors. Vs. Union of India & Ors. Reported In (2008) 2 SCC 326, it was submitted by Mr. Mookherjee that the Petition requires to be dismissed for concealment of material facts and documents without going into the merits. He further referred to the following decisions in which similar proposition has been laid down viz. (a) Rajabhai Abdul Rehman Munshi Vs/ Vasudev Dhanjibhai MOdy [AIR 1964 SC 3215 (b) K. D. Sharma Vs Steel Authority of India Ltd. [20081 12 SCC 481 (c) Dalip Singh Vs. State of Uttar Pradesh & Ors. [2010] 2 SCC 114 (d) Oswal Fats and Oils Ltd. Vs. Additional Commissioner (Administration), Bareilly Division, Bareilly & Ors. [2010] 4 SCC 728 (e) Ramjasv Foundation & Anr. Vs Union of India & Ors. [2010) 14 SCC 38 (f) Amar Singh Vs. Union of India & Ors. [2011) 7 SCC 69 (g) Smt. Bittan Devi Vs. Bank of Baroda & Ors. MANU/0144/2012 50. Answering to the aforesaid contentions, Mr. Bhatt, appearing for the Petitioner denied the allegations made by the Respondents as to the suppression of vital facts and documents. According to him, even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lay down the principle that the doctrine of suppression applies when: a party approaching the court has to make full disclosure of facts and documents; such facts and documents are required to be relevant and material; and by virtue of such suppression, relief has been secured and/or was attempted to be secured by the party guilty of suppression. 55. Narrating the facts, Mr. Bhatt further tried to demonstrate that in the instant case none of these criteria stand fulfilled. According to him, there are reasons for the same. Firstly, these facts and documents were not to the knowledge of the Petitioner and as such, there was no question of making any disclosure; secondly, these documents are not relevant; thirdly, the letter dated 6/7/2007 relates to the Trust, and in view of Section 153 of the Act, the same is not relevant or material; fourthly because neither the Company nor the CLB is entitled to take cognizance thereof and, lastly, the Petitioner has not made any attempt to wrongfully secure any order on the basis of the alleged suppression. 56. Mr.Bhatt added that the Petition has been moved by giving adequate notice to the Respondents, and as such, the Respondents have had eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and the Petitioner's entitlement to seek reliefs in terms thereof. Mr. Bhatt pointed out that the Petitioner has not filed the Suit and the Plaintiff therein is one Mr. Manohar Bassapa Hatarki - the Settlor of the Trust and not the present Petitioner and hence this fact does not amount to suppression. Further, the cause of action in both the proceedings is different and distinct. The suit is filed by said Mr. Hattarki complaining of irregularities in the affairs of the Trust on the part of Respondent Nos.3 to 5 herein and Shrikrishna Narhari Inamdar and challenges the co-option of Respondent Nos.3 and 4 in the Trust and he sought permanent injunction against the distribution and transfer of the Trust properties; and he also challenges certain documents executed in relation to the Trust properties. As against this, Mr.Bhatt submitted that the present Petition filed under Section 111 of the Act challenges the removal of the Petitioner's name as a joint shareholder qua the said shares and from the Register of Members of the Respondent No.1 and seeks vindication of her rights as a member and joint shareholder of the Respondent No.1. Apart from the above, Mr.Bhatt submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a careful analysis of the facts, I am not inclined to believe the statement of the Petitioner that she was not aware of the signing/ execution of the aforesaid documents. She has not denied signatures on it. It Is not worthy to rely upon that she has signed these papers in a routine manner without knowing the actual transaction therein. Having given my serious thought on these pleadings , it difficult for me to believe that the Petitioner's signatures were obtained on these documents by misrepresentation. It is pertinent to mention here that the Petitioner has been director on the Board of the Companies. She is not a parda nashin, illiterate lady. She is well educated. It is impossible to believe that she would sign any documents without reading the contents thereof. Based on the evidence, by way of affidavits filed in the course of the proceedings, I have come to the conclusion that the Petitioners have deliberately, knowingly and malafidely did not mention these documents in her Company Petition and did not disclose the same at the first instance. She also made false statement in the petition that she did not sign these documents. This finding is confirmed from the fact that in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to Mr. Mookherjee, when the Company Law Board is exercising the same jurisdiction that the High Court exercised earlier, the limitation Act and/or principles and/or provisions analogous to the provisions of the Limitation Act, would be applicable to the proceedings before it. Mr. Mookherjee submitted that the decision In the case of Canara Bank v Nuclear Power Corpn. of India Ltd. (1995) 84 Comp Cas 70 (SC), clearly lays down that the CLB is a Court. It is, therefore, contended that the provisions of the Limitation Act do apply to the proceedings pending before the CLB. In addition, the Ld. Sr. Counsel further contended that in any event, the Hon'ble Supreme Court in the Decision reported in 2000 (5) SCC Pg.355, has held that the expression "Court" applies to all the terminals and authorities deciding the rights of the parties. That being the case, CLB is also a "Court" for the purpose of the Limitation Act. Referring to the decisions in the case of National Consumers Dispute Redressal Commission and in the case of R.D.Chinoy Vs. Central Bank of India of India First Appeal No. 132 of 1991 dated 1/9/1992, the Ld. Sr. Counsel submitted that in the said cases, it was held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, Ld. Sr. Counsel appearing for the Contesting Respondents, submitted that the Petitioner has sought to contend that decisions of the Company Law Board that Limitation Act applies to proceedings before it is on the basis of a misreading of tn, decisions reported in 1999 (2) CLT 264, however, according to him, tb argument is untenable, as even wrong interpretation by the CLB cannot be re-agitated. Further, the CLB has in several decisions referred to above has held that the Limitation Act applies to the proceedings under Section 111(4) of the Act. 69. Distinguishing the decision as contained in AIR 1996 All P. 262 reliec by the Petitioner's Counsel wherein it is held that CLB Is not a Court for the purposes of the Limitation Act, Mr. Mookherjee submitted that the question involved in the said case was whether the Company Law Board was a court under Rule 5 of the High Court Rules and, thus, the question whether the Company Law Board was a Court for the purposes of Limitation Act was not considered in the said case. According to him, in the said case, the Issue as to whether the Company Law Board was a Court under the Limitation Act was not involved. 70. Mr. Mookherjee contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany, as provided in section 10; (b) with respect to any offence against this Act, the Court of a Magistrate of the First Class or, as the case may be, a Presidency Magistrate, having jurisdiction to try such offence," 73. Referring to the said provisions, Mr. Bhatt contended that it is thus apparent that the Act itself differentiates and distinguishes between the "CLB" and the "Court". There is, therefore, no justification for the CLB to hold itself as a Court, more so in the context of proceedings under the Companies Act. In fact, the Court is exhaustively defined and confined to the High Court; notified District Courts; and Magistrate Courts having jurisdiction to try offences under the Act. It was, therefore, argued that the CLB cannot be termed or held as a Court. 74. According to Mr. Bhatt, the aforesaid interpretation finds support in the other provisions of the Act. The Ld. Counsel pointed out that Section 634 on one hand and 634-A of the Act on the other hand make separate provisions for enforcement orders of Courts and the CLB as can bee seen from the following provisions :- "634 Enforcement of orders of Courts - Any order made by a Court under this Act may be enforc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context, Mr. Bhatt, further asserted that the CLB is not a Court, and is supported by a Constitution Bench judgment of the Hon'ble Supreme Court in the matter of Union of India Vs. Madras Bar Association (2010) 11 SCC. According to Mr. Bhatt, this judgment, in fact, squarely applies to the situation at hand since it considers the position of the National Company Law Tribunal and holds the same not to be a Court. If the NCLT is not a Court, the CLB cannot be. Based on the above, it is, therefore, argued that there is no legal basis available either under the Act or otherwise to construe and hold that the CLB is a Court, and as such, the Limitation Act does not apply. 77. In addition to the above, Mr. Bhatt urged that the present Petition is filed under Section 111(4) of the Act - which does not prescribe any period of limitation for making a rectification application. According to him, section 111 of the Act makes it apparent that there is no limitation period prescribed for an application under Section 111 (4) of the Act. The Ld. Sr. Counsel pointed out that Section 111 is in two parts, and it contemplates two different types of applications. The first being an application under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 Comp Cas 741 (CLB) ("Tommy Mathews Case") which in turn, applies Article 137 of the Limitation Act on the basis of the Calcutta High Court decision in the case of Smt. Nupur Mitra Vs Basubani Pvt. Ltd. (1999) 2 Cal Li 264, but, according to Mr. Bhatt, both the decisions are inapplicable for the following reasons:- i The Hon'ble Calcutta High Court has, in "Nupur Mitra's case" not decided the primary issue of whether the CLB is a "court" and as such, whether the Limitation Act applied to proceedings under Section 111 of the Companies Act, 1956. On the contrary, the Hon'ble Calcutta High Court has distinguished the Canara Bank's case [Para 611. ii In "Nupur Mitra's case", the CLB had held the Limitation Act to be inapplicable to proceedings before it, and was dealing with the issue of delay and lathes of 50 years in filing a proceeding for rectification. The Calcutta High Court has merely proceeded on an assumption of the Limitation Act applying to the CLB. There is, therefore, no judicial decision on applicability of the Limitation Act to proceeding before the CLB. iii. That the Hon'ble Supreme Court vide its Order dated 14/9/1999, has, in fact, remitted the matter back to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the civil court applying the Limitation Act, 1963. Reliance on this case is inappropriate. According to Mr. Bhatt, the CLB not being a Court, cannot make the Limitation Act, 1963 applicable to itself. 79. It was further argued by Mr. Bhatt that the Petition clearly states that the Petitioner has become aware of the impugned transfers only post March 2011 when she caused a search to be taken in the records of statutory authorities, including Registrar of Companies. According to Mr. Bhatt, the Petitioner has, therefore, acquired knowledge of the impugned transfers only post March 2011. The Ld. Sr. Counsel added that the Petitioner's pleas as regards indiscriminate execution of documents without her comprehension and lack of knowledge and notice of impugned transfer, is evident from the fact that the Respondents are propounding two sets of other certificates for the same documents. The Ld. Sr. Counsel pointed out that none of the statutory records i.e. the Register of Members and transfer forms and Minutes Books of Respondent No.1 are forthcoming and the Respondents had resisted giving the Petitioner inspection prior to the Petition. It was, therefore, argued that there is no questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Act, has categorically held that the CLB is court. I would like to extract the relevant part of the said decisions which confirms the aforesaid view here as under:- "Now, under section 111 of the Companies Act, as amended with effect from 31 May, 1991, the Company Law Board performs the functions that were theretofore performed by courts of civil judicature under section 155. It Is empowered to make orders directing rectification of the company register, as to damages, costs and Incidental and consequential orders. It may decide any question relating to the title of any person who Is a party before it to have his name entered upon the company's register, and any question which is necessary or expedient decide. It may make Interim orders. Failure to comply with any order visits the company with a fine. In regard to all these matters It has exclusive jurisdiction (except under the provisions of the Special Court Act, which is the Issue before us). In exercising its function under section 111 the Company Law Board must, and does, act judicially. Its orders are appealable. The Company Law Board, further, Is a permanent body constituted under a statute. It is difficult to see how it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event disturbance or deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a party's own inaction, negligence or laches. The object of the statutes of limitations is to compel a person to exercise his right of action within a reasonable time as also to discourage and suppress stale, fake or fraudulent claims. 86. Keeping in view the aforesaid object and reason as to application of limitation, if it is held that the provisions of the Limitation Act do not apply in the relation to petition filed under Section 111 (4) of the Act, in that case, it would imply that an aggrieved party may approach to the CLB even after several years. This cannot be a true intent of the law. As stated above, as a matter of a policy, the purpose of the limitation prescribed in law is to restrict the litigation on the ground of limitation so that the parties can approach the court of law within a reasonable time. Only in the cases, where there is a continuous wrong, the law of limitation become irrelevant. In the present case, there is a definite date of cause of action and, therefore, it is expected that an aggrieved party should approach the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of the Limitation Act do not apply. I am unable to accept this contention because for the purpose of limitation, the date of knowledge is the crux of the matter. In my opinion, even in the case of void transaction, if the case is barred by limitation, the court will not grant any relief to such party. 92. On overall discussion of the preliminary objections raised by the Respondents challenging the maintainability of the Company Petition, I have come to the conclusion that the petitioner has not approached the CLB with clean hands and, therefore, she is not entitled to the reliefs sought for and the petition deserves to be dismissed. Further, I have come to the conclusion that the petition is barred by limitation and on this ground also the petition deserves to be dismissed. 93. Although on the above two preliminary grounds the petition fails, but taking into consideration that the matter was heard on merits also, I would like to enter into adjudication of the petition on the merits. It is matter of record that the Answering Respondents have not produced the instruments of transfer in respect of impugned shares. Further, the Answering Respondents have not produced th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
